FAO Schwarz to Place Toy Stores Inside Macy's Stores
Macy's, Inc. and FAO Schwarz recently announced an agreement that will see FAO Schwarz opening FAO-operated toy stores in up to 275 Macy's stores in fall 2008. FAO Schwarz stores are planned to expand into a total of approximately 685 Macy's stores over the next two years. The FAO Schwarz store-within-a-store concept was tested in fall 2007 at Macy's on State Street in Chicago.
Under the agreement, FAO Schwarz has named Macy's the exclusive U.S. retail store host of FAO Schwarz departments, and FAO Schwarz will be the exclusive toy department in Macy's stores. FAO Schwarz will continues to independently own and operate its own stores including the Fifth Avenue Flagship store in the heart of New York City and its website, FAO.com.
The press release from the two companies says 75 of the FAO Schwarz inside Macy's locations will be as large as 1,000 and 3,500 square feet. Another approximately 200 Macy's stores will host smaller FAO Schwarz departments of between 200 and 300 square feet. FAO Schwarz products will also be sold on the macys.com website.
It sounds like a smart move by both retailers. Obviously, they will want to move quickly to open as many FAO-inside-Macy's stores as possible before the holiday toy rush hits.